Your Quick Guide to Outsourcing Development
Everywhere you look, companies are outsourcing their development needs.
If you’re not outsourcing yet, you may be falling behind by pouring money into payroll or expensive U.S-based contracts.
Then again, it’s easy to get burned by outsourcing. You can end up with just as much expense, more frustration, and subpar deliverables.
So what should you do?
Here’s your quick guide to outsourcing your development successfully, with results that will make you (and your finance team) happy.
When should you consider outsourcing your development?There are three signs that outsourcing may be right for your company.
1. You need flexible and scalable capacity.Every company today needs a top-notch website, e-commerce platform, or app. Are you going to hire a full-time developer or team of developers to create those for you? Sure, there are benefits to having a local development team: for example, you have their time and attention 40 hours a week in your office. But that means you have to pay them full-time wages and overhead too, which gets very pricey. What if you could get the development support you need, when you need it, and then offload it when you don’t? That’s where outsourcing comes in.
2. You need to cut or limit expenses.Developers are expensive. Your rate for experienced web developers in the U.S. could easily be in the mid-$150,000s and even up to $220,000 or more per year. That doesn’t include payroll expenses, benefits, office perks, and the time it takes to manage another employee. The Bureau of Labor Statistics reports that for every $2.24 an employee earns in wages, the employer pays an additional $1.00 in other costs. So you could easily save 30% on payroll taxes and benefits alone by outsourcing.
3. You need access to more talent.Top-tier developers operate in a highly competitive job market, and you may not be able to attract one to your company. Whether it’s your location, your industry, your compensation plan, or simply the competitiveness of the market, you might find top developers looking the other way when you call. Plus, as you build your company, you may need to invest your limited resources in other areas, such as operations, finance, or legal support. That might prevent you from being able to invest in an in-house development team. That’s where outsourcing can bring huge benefits. You can draw on the expertise of highly qualified developers without having to make room for them on staff. And you can take advantage of the diversity of talent out there at the exact time you need it.
3 reasons outsourcing goes badly
That brings us to some things to watch out for — because outsourcing your development can make you if done well … or break you if done poorly.
Let’s drill down a little farther into some of the reasons business leaders and managers hesitate to outsource. Here are the top three reasons:
1. Unexpected costs (in time and money):If you’ve ever managed an independent contractor, you know there are hidden costs associated with it. You have to provide more management and oversight, onboarding a project can take longer, and there are likely to be gaps in messaging, goals, and ways of working. Choosing the wrong contractor can lead to a lot of headaches and miswork in the long run.
2. Communication problems:
Outsourcing could mean you have to manage projects with developers in different time zones. For example, Romania is seven hours ahead of the East Coast, and India is ten hours ahead. That makes real-time interaction extremely difficult to manage. You can’t just pick up the phone and know you’re going to talk to someone when you need to.
You’ve probably also heard communication horror stories like this: you receive delivery after a long and expensive project only to discover that the documentation is in a language you and your team don’t understand.
Finally, you might also have to deal with cultural boundaries in outsourcing. It’s easy to step on toes and become frustrated when managing cultural differences.
3. Uncertainty about quality:
It’s simply more difficult to evaluate the competency and expertise of a developer at a distance. You have to be careful that you’re not investing money and time into a relationship that’s not going to yield the results you expect.
Okay, those are three of the big pitfalls of outsourcing. But the truth is that outsourcing development is still a great idea for most businesses. So the question is, “How do I outsource well?” More about that next.
3 essentials of successful outsourcing
Here are the three things you need to keep in mind as you prepare to outsource your development.
There’s nothing worse than trusting that a project will be completed on time … only to learn two days before the deadline that it’s going to be another four weeks. Yes, you’ve probably been there. It’s not a fun place. In fact, it can be incredibly costly.
Missed deadlines, lack of communication, even abandoned projects — these are some of the widespread fears of contracting and outsourcing. When you outsource, you put your development in the hands of someone who isn’t on your payroll full-time. That means they may be working on other projects for other clients. You need to be able to trust your outsourced developer and know that you’ll have their best work and full attention when you need them.
With the average U.S.-based developer commanding top dollar plus benefits, it’s no surprise that one of the top reasons for outsourcing development is cost. Outsourcing internationally could cut your development costs in half if you find the right developer in the right country.
Not every country offers the same cost savings. Eastern Europe might offer you savings compared to U.S.-based developers. Latin America could be an even better bargain.
You want to know you are getting high-quality work, right? Anyone can say they have development experience. But how well is that talk going to hold up on your business’s website or app?
As important as cost is, you also don’t want to be stuck with a subpar product for the next several years. That leads to troublesome workarounds and fixes, poor experiences for customers and your team, and maybe even an expensive rebuild. You have to get it right the first time by working with a trusted and vetted developer who brings all the skills and knowledge you need.
So now that you understand the three essentials of outsourcing well, you may be asking, “Where should I outsource?”
Where should I outsource software development?
You’ve probably seen the lists of best places to outsource software development. They typically include India, Poland, China, and others.
In 2022, though, the best option for outsourcing is Argentina.
Here are six reasons to outsource development to Argentina:
Many of the top outsourcing destinations are politically unstable and expose you and your project to lots of potential problems. Argentina is a stable democracy with a history of free markets.
2) Expertise:The tech sector in Argentina is growing fast, with success stories like MercadoLibre and Globant SA. Argentina is now Latin America’s largest exporter of computer services.
3) Education:Argentina’s well-developed education system is producing a high-quality workforce. Deloitte reports, “One of Argentina’s advantages is its competitive relation between the quality (in terms of average years of education and English level) of its labor force and the labor cost for the companies. Currently, the minimum salary is … one of the lowest in Latin America.” According to the World Bank, Argentina has the second-highest secondary school enrollment in Latin America.
EF says that Argentina is the only Latin American country with “High Proficiency” in English, and Deloitte ranks Argentina first in Latin America “regarding English language skills.” The bottom line is that Argentinians commonly speak English.
5) Geography:Two advantages stand out here. First, Argentina is only two hours ahead of the East Coast. Second, if travel is necessary, costs are relatively low compared to many other places you might outsource to (e.g., Eastern Europe or Asia).
6) Cost:Salaries for web developers in Argentina are significantly less than those of developers in the U.S. and are often less than salaries in other top outsource countries.
How ThinkBoxHQ can help you outsource development
Are you ready to start outsourcing your development?
ThinkBoxHQ can help you take advantage of the benefits and avoid the pitfalls of outsourcing so you can meet your business goals and succeed.
Our U.S.-based management team coordinates with our network of trusted developers in Argentina to provide a development outsourcing experience that you’ll be happy with. Our consistent team of developers is thoroughly vetted and approved — we trust them for our own development projects!
Our goal is to make development fast, easy, and affordable for you:
Get matched quickly with the best developers for your business.
We take care of the hard parts so you can focus on your vision.
Our development team gets you better productivity at half the cost.
Contact us to get started. Best of luck!